Porsche on track for 9th record year

FRANKFURT -- Porsche AG said on Tuesday it was on track for a ninth consecutive year of record profit after its new Cayenne sports utility vehicle (SUV) helped lift revenues 18 percent in the nine months to the end of April.

Publishing nine-month figures for the first time ever, the world's most profitable car maker said revenues had jumped to 3.89 billion euros ($4.6 billion) in the period, while profits were also higher than a year ago.

"Porsche also expects revenue and profit growth in 2002-03 compared to the previous year, with the company benefiting from its forward-looking currency hedging," it said in a statement. It still expects to sell 65,000 cars this year.

Porsche has previously declined to issue quarterly earnings reports, saying they are of no benefit to shareholders and encourage a short-term business strategy. Even now it continues to report profits only on a half-yearly basis.

SPORTSCARS IN REVERSE

Sales of its 911 and Boxster sportscars slipped nine percent in the first three quarters of its business year, although demand for the Cayenne, its first foray into the off-road market, meant the company sold 13 percent more cars overall.

The Cayenne, which weighs more than two tonnes but can hit 266 kilometres an hour in its most powerful version, pushed group sales up 18 percent in North America, its biggest market.

Porsche sells roughly half its cars in the United States, a strategy which helped its profits soar in the early 1980s but almost put it out of business in the second half of the decade when it failed to hedge against the weakening dollar.

It has learned its lesson since then, fully hedging its exposure to the dollar for the next four years. Chief Executive Wendelin Wiedeking was quoted recently as saying that as a result he was "very relaxed" about the euro's recent rise.

The market may not share his confidence.

"The depreciating U.S. dollar will do little harm to the company's financials ... but we fear that this factor will put a cap on Porsche's share price from the sentiment side and prevent it from closing the valuation gap soon," private bank Sal. Oppenheim said in a recent note.